However, some analysts suggest that the new budget will adversely affect the incomes of the poorest and neglect the priorities of aid coming in from abroad. Analysis by the Guardian’s “Poverty Matters Blog” suggests that this is due to an “economic triumphalism” amongst Indian elites following the Indian economy’s resilience to the recent banking crises.

Key Issues:

The Guardian suggests that this attitude has led to key issues being neglected in the recent budget announcement, the most fatal of which being malnutrition. 43.5% of children under the age of 5 in India are now underweight, resulting in India being ranked below countries like Sudan and Zimbabwe in the Global Hunger Index (Zimbabwe also being a country ranked lowest on the Legatum Prosperity Index).

The budget does maintain a commitment to agriculture through food and fertilizer subsidies that should compliment micro-financing efforts in this area, though the budget appears to being “playing it safe” in this area.

Mukherjee also announced that he would be cutting subsidies on kerosene and fertilizer. This will result in an increase in the prices of these goods which are used primarily by farmers and the poorest, thus undercutting micro-financing efforts to farmers in, for example, the state of Punjab, which is notorious for its struggles.

On the same week as the Indian government’s budget announcement, DFID also announced its new budget, which included an overall increase in aid to India by 2.19% (a look at DFID’s dilemma with aid to India can be found here). DFID’s efforts in India have complimented those of the Indian government and focused on health and education, which has been consistently high on the Indian government’s agenda, and India’s poorest states. Whether or not India’s new budget will have an adverse effect on India’s poorest remains to be seen. However, it seems that economic growth alone has not yet providing sufficient means for India’s poorest to lift themselves from their conditions, thus the government may need to change its tactics in addressing this enormous problem.

The Center for Global Prosperity is focused on educating policy leaders and the general public on the crucial role of the private sector (both non and for profit) as a source of economic growth and prosperity around the world. To accomplish this central mission, the Center produces The Index of Global Philanthropy and Remittances, which identifies the sources and amounts of private giving around the world and The Index of Philanthropic Freedom, which identifies the barriers and incentives to private giving in 64 countries.